Plaintiff (Law Firm Han-Jon, Attorneys Im-soo et al., Counsel for plaintiff-appellant)

LTP Korea Co., Ltd. (Bae & Yang LLC, Attorneys Lee Byung-soo et al., Counsel for the defendant-appellant)

June 2, 2016

Seoul Central District Court Decision 2014Gahap580358 Decided September 9, 2015

1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

[Claim]

The defendant shall pay to the plaintiff 492,60,000 won with an annual interest rate of 20% from August 8, 2014 to the day of complete payment.

【Purpose of Appeal】

The judgment of the first instance is revoked. The plaintiff's claim is dismissed.

1. Basic facts

(a) Status of parties;

On December 8, 2006, Non-party 1 entered into a joint agreement with the Korea Investment Group (Merinter Enter Enter Group, Ltd.) in order to carry out the business of developing commercial and residential facilities (hereinafter “instant development project”) on the Liland complex, tourist facilities and facilities incidental thereto, or on the site of the facilities incidental thereto in the Jungdo-dong and Seocheondong-dong. The Defendant, on December 29, 2008, became a partner of the said project on behalf of South Korea Co., Ltd., and was the representative director of Non-party 1.

B. Investment agreement and conclusion, etc. of the instant return agreement

1) On August 27, 2009, the Defendant invested a total of KRW 15,00,000 in the instant development project on seven occasions, and as a result, entered into an investment agreement with Nonparty 2 to provide the Defendant’s share of KRW 45% to Nonparty 2 through capital increase. On September 4, 2009, the Defendant received KRW 500,000 in the name of the Plaintiff (hereinafter “the instant investment amount”) and KRW 100,000,000 in the name of the Plaintiff from Nonparty 2, and Nonparty 3, respectively. The instant investment amount in the name of the Plaintiff was raised by Nonparty 4 from the Plaintiff for the purpose of raising the investment amount of Nonparty 2.

2) As Nonparty 2 failed to pay the remainder of the investment under the said investment agreement to the Defendant after Nonparty 2, the Defendant cancelled the said investment agreement with Nonparty 2 in 2011, and, at the same time, decided that the existing investment funds of Nonparty 2 would be paid upon receipt of a last investment.

3) When the Plaintiff was unable to receive a refund from Nonparty 2 who transferred the instant investment amount to the Defendant under his own name, the Plaintiff directly demanded the Defendant to pay the instant investment amount on several occasions. Accordingly, on September 8, 201, the Defendant entered into an agreement between the Plaintiff and the Plaintiff under which “5 million won, which was paid by the Plaintiff as the investment deposit, was paid from the Plaintiff on September 4, 2009, shall be promptly returned to the Defendant, and 5% per annum for the interest portion shall be paid by the time of return, and if so, the Defendant shall lose the benefit of time and pay the interest for 20% per annum (hereinafter “instant refund agreement”).

(c) Preparation of a cash loan contract and payment of money;

1) On July 30, 2012, the Defendant drafted a monetary loan agreement with Jinjin Electric Co., Ltd. (hereinafter “Jinjin Electricity”) with the following content:

The Defendant shall enter into a monetary loan agreement for electricity consumption with the following contents. Article 1 / [Purpose] The Corporation shall loan 1,00,000 won to the Defendant, and the Defendant shall loan 24 months from the date of deposit in the Defendant’s bank account. The term of loan / [lease Terms] Article 3 [Loan Terms] shall lend the loans specified in Article 1 to the Defendant and other consortiums Korea Development Project, under the following conditions: The Jinjin shall be liable for the Defendant’s lending of the amount necessary for investment at least 00 days to the Defendant’s interest rate of 1,00,000,000 won from the development projects incidental thereto; the Defendant shall not be liable for the payment of the interest rate of 00,000 won from the date of loan / [40,000,000 won from the date of loan / [40,000 won from the date of loan / [40,000,000 won or more from the date of loan / [40,00,00,000,00 days interest from the Corporation’s.

2) On July 31, 2012, the Defendant drafted a monetary loan contract for consumption as of July 30, 2012, and drafted a new monetary loan contract with the Hanjin Electric Co., Ltd. as of July 31, 2012, and received KRW 650,00,000 from the Hanjin Electric Co., Ltd. on July 31, 2012.

The Jinjin Electric Co., Ltd. contained in the main text and the defendant enter into a monetary loan agreement with the following contents. Article 1 [amount] The Jinjin Electric shall lend 650,000,000 won to the defendant, and the defendant shall borrow it. Article 2 [interest] The interest on the above borrowed money shall be paid at the rate of 0% per annum for the principal. Article 3 [Period and Method of Payment] The defendant shall pay the borrowed principal at the rate of 0% per annum until July 31, 2014, and pay it to the account designated by Jinjin Electric Co.:

(d) Establishment of special-purpose corporations and transfer of development project rights;

1) Meanwhile, on September 1, 2011, the Defendant exclusively carried out the instant development project with other participants, including Gangwon-do, Korea Investment Securities Co., Ltd., and KCC Construction Co., Ltd., and entered into a “SPC” agreement for the establishment of a special purpose corporation (SPC) in order to raise necessary funds and maximize profit. In the said investment agreement, the Defendant, along with a special purpose corporation to be established in the future, will make an investment in approximately KRW 22,50,00,000,000.

2) On August 6, 2012, the Defendant established EL Development Co., Ltd. (hereinafter “EL Development”) as a special purpose corporation in accordance with the “Written Statement of Investment Agreement on the Development of Lancheon Ireland Korea,” and Nonparty 1, the representative director of the Defendant, was appointed as the representative director. On December 19, 2013, the Defendant agreed to receive compensation for the existing expenses incurred in the transfer of the development project right possessed by the Defendant, and accordingly, received KRW 2,200,000 from the side of Lan High Development around December 20, 2013.

[Basis] Facts without dispute; Gap evidence Nos. 1 through 3, 10, 11 (including paper numbers; hereinafter the same shall apply); Eul evidence Nos. 1, 2, 9, and 28; witness of the first instance trial; the testimony of non-party 2 and non-party 5; and the purport of the whole pleadings

2. The parties' assertion

A. The plaintiff

1) Although the Defendant received 650,000,000 won from Jinjin from July 31, 2012 in relation to the instant development project, the Defendant was obligated to pay the Plaintiff the principal and interest of the Plaintiff’s investment in violation of the instant refund agreement, and as such, the Defendant was obligated to pay the Plaintiff the instant investment amount and interest of 20% interest per annum from September 4, 2009, pursuant to the instant refund agreement. The Plaintiff’s payment of KRW 50,000,000, which was paid by the Defendant on August 7, 2014, was made by law in the order of the original amount, and the remaining principal would be KRW 492,60,000,000,000 in the remainder, and the Defendant is obligated to pay the Plaintiff the said amount and interest of the agreed interest.

2) At least on December 2013, the Defendant: (a) transferred the instant development project business right to Lel Development; (b) received KRW 2,200,000,000, which is part of the transfer price; and (c) was the same as the Defendant received an investment; (b) accordingly, the Defendant is obligated to return the principal and interest of the investment to the Plaintiff pursuant to the instant refund agreement.

B. Defendant

1) The phrase “where the Defendant receives an investment from the Republic of Korea or abroad” stipulated under the instant return agreement as the terms and conditions for the return of the investment amount is limited to the case where the Defendant receives an investment in share in connection with the instant development project, as alleged by the Plaintiff, and the Defendant did not receive an investment in share from Jinjin Electric or another company. The Defendant’s KRW 650,000,000, which was received from Jinjin Electric, is merely a loan, not an investment, but a loan, and the price that was received by the transfer of the right to develop Lel Development cannot be deemed as an investment in share. Accordingly, the obligation to return the investment amount under the instant return agreement

2) Even if the receipt of money from Jinjin constitutes a case of receiving an investment as stipulated in the instant return agreement, the starting point of 20% interest per annum shall be applied from the time when the return agreement of this case was violated, i.e., receiving money from Jinjin.

3. Determination

A. The occurrence of the duty to return the investment deposit under the instant return agreement

1) Relevant legal principles

As long as the establishment of a disposal document is recognized as authentic, the court shall recognize the existence and content of the expression of intent as stated in the document, unless there is any clear and acceptable reflective evidence that denies the contents of the statement. In the event that there is any difference between the parties regarding the interpretation of a contract and the interpretation of the intent of the parties expressed in the document is at issue, the court shall reasonably interpret the document in accordance with logical and empirical rules by comprehensively taking into account the contents of the text, the motive and circumstances leading up to the agreement, the purpose to be achieved by the agreement, the parties’ genuine intent, etc. (see Supreme Court Decision 2002Da6753, Jun. 11, 2002).

2) The meaning of investment under the instant return agreement

In light of the following circumstances, it is reasonable to view that the Defendant’s “case where the Defendant received an investment from a third party in Korea or abroad” refers to a case where the Defendant received an investment from a third party, regardless of the form thereof, and it does not mean a case where the Defendant received an investment share, and the testimony of Nonparty 2 by Nonparty 2 is contrary to this, and there is no other counter-proof as to trust and good faith.

① According to the language and text of the instant return agreement, only the phrase “where the Defendant is to obtain an investment from the Republic of Korea or a foreign country,” the term “share investment” does not appear at all.

② At the time of the instant return agreement, Nonparty 5, who had worked as the Defendant’s president at the time of the instant return agreement, stated to the effect that “the Defendant agreed to return the instant investment amount to the Plaintiff, but did not have any means to return the said amount due to the Defendant’s lack of financial capacity to return it to the Plaintiff, and that the instant return agreement was concluded in the sense that it would not be said that the Plaintiff would return the instant investment amount only if the Plaintiff received equity investment.” Nonparty 2 or Nonparty 7 did not explicitly mention that he would return the said amount only when the Defendant received equity investment.

③ The Defendant asserts that the repayment agreement of this case was derived from the investment agreement of August 27, 2009 that Nonparty 2 provided 45% of the Defendant’s share to Nonparty 2 in return for the Defendant’s investment of KRW 15,000,000,000. Thus, the concept of investment in the refund agreement of this case also refers to equity investment. However, in light of the fact that the parties to the said investment agreement and the refund agreement of this case are different, and that the said return agreement of this case is merely stated as equity investment, unlike the fact that the investment of the said investment agreement means the equity investment, the investment of the refund agreement of this case does not mean the equity investment.

3) Whether the investment was made from the first class electricity

In light of the following circumstances, it is reasonable to view that Gap evidence Nos. 3, 5, 7, 8, and Eul evidence Nos. 3, Eul evidence Nos. 3, non-party 5's testimony of non-party 6 witness of the court of first instance, and non-party 6's testimony of non-party 6 witness of the court of first instance constituted "where the defendant is to receive an investment from domestic or foreign countries" as stated in Eul evidence No. 29 and the testimony of non-party 6 witness of the court of first instance, and the defendant's testimony of non-party 5, 20,00 won received from Jinjin Electric Co. on July 31, 2012, although it takes the form of a loan, it is substantially an investment in the defendant for the purpose of receiving the electrical construction, and the return agreement of this case provides for "where the defendant is to receive an investment from domestic or foreign countries," and contrary, it is difficult to reverse the above recognition merely on the basis of the statements No. 29 and evidence No.

① Since around 2011, the first class electricity, the main business of which is electrical construction, came to know that the Defendant recruited investors for the instant development project, it would be expected that the business would be a big profit if the Defendant received electrical construction, and would have contacted the Defendant. During that process, the Defendant would have to make an investment in order to receive electrical construction from the Defendant.

② On October 6, 201, Jinjin Electric Co., Ltd.: (a) confirmed that the consortium participating in the Defendant or the Defendant, who was promoting the establishment of a special purpose corporation in accordance with the “Wolcheon Ireland Korea Investment Agreement”, has the status as the project implementer of the instant development project; (b) submitted a letter of intent to participate in the instant development project, stating that the Defendant or the consortium, at the time of the establishment of the special purpose corporation, has invested not more than KRW 2,00,000,000, and that the Defendant will monopoly the installation and installation of electric power facilities and installation in the instant development project.

③ On July 30, 2012, Jinjin set up a monetary loan agreement with the Defendant on July 30, 2012, stating that the Defendant will invest KRW 1,000,000,000 on the condition that it will receive electrical construction of at least 40,000,000 among the instant development project works, and that it will take the form of lending in order to make the accounting clear and refund the investment amount smoothly when the terms and conditions are not fulfilled, while lending KRW 1,00,000 to the Defendant.

④ However, the said monetary loan agreement of July 30, 2012 includes the contents that it is difficult to view that it is a general monetary loan agreement for consumption, such as “the Defendant is liable to receive electrical construction of at least KRW 40,000,000 from the first class electric power, on condition that he/she receives KRW 1,00,000,000 from the first class electric power, and if he/she performs his/her responsibility, the above loan belongs to the Defendant’s profits, and only if the Defendant fails to perform his/her responsibility, he/she may seek the return of the said money and the interest thereon.” Thus, at the first class of the first class electric power, it was difficult to account as a loan based on the money loan agreement of July 30, 2012.

⑤ On July 31, 2012, in order to manage the accounts of the investment funds as a loan, the Defendant, except for the contents related to the development project of this case, prepared a cash loan contract with the purport that Jinjin Electricity merely lends 650,000,000 won to the Defendant on July 31, 2014, and then, it appears that Jinjin electricity paid 650,000,000 won to the Defendant.

(6) Since Jinjin entered the nature of KRW 650,00,000 in the official document sent to the Defendant, and applied for provisional seizure of the Defendant’s claim amounting to KRW 650,000,000, with the loan claim amounting to KRW 650,000,000, the Defendant also appropriated the above amount in the tax settlement statement as a short-term loan from Jinjin Electric in the form of a short-term loan for the purpose of smoothly returning the investment amount. Thus, it is difficult to view that the above circumstance alone is a loan with the nature of KRW 650,00,000,000 paid by Jin Electric to the Defendant.

4) Therefore, the Defendant’s investment of KRW 650,00,000 from Jinjin to the Plaintiff pursuant to the instant return agreement shall be deemed to have arrived at the maturity of the Defendant’s obligation to return the instant investment amount to the Plaintiff.

(b) Time of occurrence of interest in arrears;

In full view of the statements in Gap evidence Nos. 2 and 6 and the purport of Non-Party 5's testimony and arguments in the court of first instance, in case where the defendant did not immediately return the investment amount of this case to the plaintiff despite having received an investment from his country or foreign country when the return agreement of this case was concluded, the defendant can be recognized as having agreed to lose the benefit of time and pay interest for delay of 20% per annum from September 4, 2009 when the plaintiff remitted the investment amount of this case to the defendant, and there is no counter-proof. Thus, as seen earlier, unless the defendant violated the return agreement of this case, the interest for delay of 20% per annum of the investment amount of this case shall be deemed to accrue from September 4, 2009

(c) Appropriation of performance;

The Plaintiff was paid KRW 500,00,000 by the Defendant for the return of the investment amount of this case on August 7, 2014, and there is no evidence to prove that there was an agreement between the Plaintiff and the Defendant on the satisfaction of payment. 500,00,000, which the Defendant discharged as above, as the above, was appropriated for the interest of KRW 492,60,000 (interest of KRW 492,60,000 for interest from September 4, 200 to August 7, 2014) pursuant to the order of statutory satisfaction of payment of the principal, and the interest of KRW 7,40,000 for the repayment of payment was first appropriated for the principal amount of KRW 492,602,739 or as the Plaintiff seeks, KRW 500,500,000,000 for the remainder of the principal amount, KRW 400,000,00 for the Defendant’s last repayment of payment of payment of the principal amount of KRW 7000,000.640.

D. Sub-committee

Therefore, the Defendant is obligated to pay to the Plaintiff the agreed interest in arrears calculated at the rate of 20% per annum from August 8, 2014 to the day of full payment, which is the day following the payment of the above 492,60,000 won and the day following the payment of the debt.

4. Conclusion

Therefore, the plaintiff's claim of this case is accepted on the grounds of its reasoning, and the judgment of the court of first instance is just, and the defendant's appeal is dismissed as it is without merit, and it is so decided as per Disposition.

Judges dominium (Presiding Judge)